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Credit Suisse First Boston Fined $100 Million

Posted by ryuzaki0 on from the all-fun-and-games-until-someone-gets-an-eye-put-out dept.

A couple of people wrote in to note that Credit Suisse First Boston, which was the underwriter for VA Linux ? ' IPO, has been fined $100 million for actions they took in that and other high-tech IPO's during the stock market boom. CSFB allocated shares of certain IPO's to customers who made kickbacks to CSFB. Here's their side of the story. There's also an additional statement by the regulators and CSFB's settlement agreement (PDF).

5 of 178 comments (clear)

  1. Re:Cry me a River by mccalli · · Score: 4, Insightful
    However, it still begs an important question: How can wealth "evaporate"? b

    Wealth measured in stock is purely a matter of belief and confidence. If everyone believes your stocks are worth something, then they will be willing to pay a price for them.

    If circumstances change and confidence goes, then people no longer believe your stocks are worth anything and so no-one will pay any more. The upshot? Your wealth has evaporated.

    Of course, a counter argument would be that, with stocks, you never had any wealth in the first place. You merely had the potential to try and convert paper figures into reality.

    Cheers,
    Ian

  2. How about the clients that made the money? by Great_Geek · · Score: 4, Insightful

    Okay, so they (finally) nailed CSFB. How about the other side of that transaction? All those clients that made all those millions - they just live happily after? From the news releases, CSFB was stupid enough to keep records in nice spreadsheets, so it should be easy to identify and fine the clients too.

    The cynical view says it won't happen - the brokers like to keep the clients happy.

  3. Re:The funny thing is ... by ErikTheRed · · Score: 3, Insightful

    Yeah, but when you pay the fine on a ticket, it's a couple bucks and they jack your insurance some. We're talking US$100,000,000 here.

    I can't exactly see a bunch of suits smoking fat cigars in the boardroom going "Yeah, yeah, it's only a hundred mil. Sign the back of the motherfucker and send it in."

    --

    Help save the critically endangered Blue Iguana
  4. Not really needed by autopr0n · · Score: 3, Insightful

    I think most people know that VALinux (or is it VAsoftware now?) owns Slashdot. And for those who don't know I don't really think it's that relevant in this case. This has to do with CSFB's underhandedness with VA stock, not something VA did itself.

    --
    autopr0n is like, down and stuff.
  5. This wouldn't have happened... by acoustix · · Score: 3, Insightful

    if EVERYBODY were allowed to participate with an IPO.

    For some reason only "privilidged" people are allowed to buy the stock before it starts. So why do we allow the rich to get richer? Everybody should be able to buy those stocks before trading starts.

    No exceptions.

    --
    "A plan fiendishly clever in its intricacies"- Homer Simpson